By Cheng Dawei

 

In late 2007, China concluded several rounds of dialogue with the major economies of the world.

 

The third Strategic Economic Dialogue between China and the United States ended with a joint statement on December 14. The first high-level dialogue between China and Japan on economic cooperation ended on December 2 and the Chinese and European leaders closed their 10th summit on November 28 in Beijing.

 

The talks with the major economies is solid proof of China's emergence as a key player in the global economy.

 

With Chinese characteristics, the talks are increasingly important in China's efforts to solidify links with its trade partners.

 

In the year just ended, China participated in economic globalization more intensively, nurturing international cooperation in energy, raw materials, and environmental protection.

 

Along with these enhanced ties, China sees more opportunities of mutual benefit with other economies, and potential conflict as well.

 

Rising trade surpluses is a primary source of China's conflict with the United States and the European Union, an issue of top concern in the economic talks.

 

The Ministry of Commerce said China had a trade surplus of $97.1 billion with the EU in 2006, and the figure from January to October last year was $108.8 billion, making China the sole source of the EU's trade deficit.

 

China's trade surplus with US has been top priority in Sino-US talks.

 

As has been pointed out time and again, the huge trade surplus of China is an inevitable consequence of its position in the global industrial arena - it has a gigantic manufacturing industry.

 

China, however, is not the only beneficiary of the trade surplus. About 58 percent of China's exported commodities in 2006 was produced by foreign invested factories in the country. It is not difficult to imagine how many foreign companies have enjoyed their revenue from this surplus.

 

Besides the trade surplus, the quality of Chinese exports was also questioned by many trade partners for which the Chinese government took active measures to respond.

 

Last year, China had several problems to deal with regarding the domestic economy, including the continuous appreciation of the yuan against the US dollar, excessive liquidity, and fluctuations in the stock market. The pressure from major economies was also unprecedented for China regarding the opening of its tertiary sector, especially its financial field.

 

Many countries expressed their wish that China should make some contribution toward maintaining a balance of the global economy, which is under threat, primarily by the absence of an effective scheme for settling international trade issues.

 

The World Trade Organization (WTO), which has been a practical and authoritative body for settling trade disputes for decades, is in a deadlock after the Doha round of negotiations practically collapsed.

 

Even if the WTO framework is still operational, it can hardly coordinate international negotiations on energy, finance, environment, and other new issues.

 

Consequently, bilateral agreements and regional arrangements on trade has become an alternative solution for many countries.

 

The US completed its negotiations with the Republic of Korea on a free trade agreement (FTA) last year. Singapore, Malaysia, India, and Thailand are next on the US list.

 

Japan has already signed a FTA with Singapore. A free trade agreement is already in operation among the ASEAN countries.

 

The EU, comprising 27 countries, is resuming relations with the African countries, and exploring the possibility of opening trade negotiations with ASEAN too.

 

The 21 members of the Asia-Pacific Economic Cooperation (APEC) agreed to consider establishing a free trade area in the region in November 2006, but further negotiations are still to be held.

 

Among all these new changes and uncertainties in global trade, China needs to position itself properly.

 

The authorities are trying to promote China's ideas on world harmony, enhancing communication with its partners on issues of common concern, settling conflicts peacefully, and promoting the global economy.

 

China is expressing its ideas in a mild and practical way through communication with other countries.

 

The strategic talks China had with the US, Japan and EU was part of its efforts to carry out this plan.

 

Dialogue is a wise choice facilitating China to negotiate and communicate with other countries on an equal and friendly footing.

 

As multilateral negotiations are not fairing too well at this time, these talks have worked as an effective way to keep the negotiations going.

 

The talks between high-level officials could end in influential decisions through flexible discussions.

 

As a supplement to these talks, China has also decided to invite related bodies of its administration and private institutes to participate so that they can carry out the agreements reached by the senior officials.

 

The author is a professor with Renmin University of China

 

(China Daily January 4, 2008)